Analyzing Danske Bank (OTCMKTS:DNKEY) and Sumitomo Mitsui Financial Group (NYSE:SMFG)

Danske Bank (OTCMKTS:DNKEY) and Sumitomo Mitsui Financial Group (NYSE:SMFG) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Danske Bank and Sumitomo Mitsui Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danske Bank	0	2	4	0	2.67
Sumitomo Mitsui Financial Group	0	1	0	2	3.33

Dividends

Danske Bank pays an annual dividend of $1.57 per share and has a dividend yield of 6.0%. Sumitomo Mitsui Financial Group pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Danske Bank pays out 72.4% of its earnings in the form of a dividend. Sumitomo Mitsui Financial Group pays out 17.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility & Risk

Danske Bank has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Sumitomo Mitsui Financial Group has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Earnings and Valuation

This table compares Danske Bank and Sumitomo Mitsui Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danske Bank	$8.61 billion	4.98	$3.49 billion	$2.17	12.11
Sumitomo Mitsui Financial Group	$71.68 billion	2.17	$10.45 billion	$1.34	18.23

Sumitomo Mitsui Financial Group has higher revenue and earnings than Danske Bank. Danske Bank is trading at a lower price-to-earnings ratio than Sumitomo Mitsui Financial Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Danske Bank and Sumitomo Mitsui Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Danske Bank	40.38%	13.14%	0.62%
Sumitomo Mitsui Financial Group	15.68%	10.57%	0.52%

Insider and Institutional Ownership

3.9% of Sumitomo Mitsui Financial Group shares are owned by institutional investors. 0.1% of Sumitomo Mitsui Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

About Danske Bank

Danske Bank A/S provides various banking products and services to corporate, institutional, and international clients. The company offers insurance and pension products, mortgage finance and real-estate brokerage services, asset management and trading services in fixed income products, foreign exchange services, and equities. It also provides advisory services to personal and private banking customers; and business advisory services, including acquisition, change of ownership, strategic development, or international expansion. In addition, the company offers financing, risk management, investment, and financial advisory services for large corporates and institutions; healthcare solutions; and online and mobile banking services. It has operations in Denmark, Finland, Sweden, Norway, the United Kingdom, and internationally. The company was founded in 1871 and is headquartered in Copenhagen, Denmark.

About Sumitomo Mitsui Financial Group

Sumitomo Mitsui Financial Group, Inc., together with its subsidiaries, provides banking, leasing, securities, credit card, and consumer finance services in Japan, the Americas, Europe, the Middle East, Asia, and Oceania. It operates through Wholesale Business Unit, Retail Business Unit, Global Business Unit, and Global Markets Business Unit segments. The company was incorporated in 2002 and is headquartered in Tokyo, Japan.